THE Free State economy remains trapped in a low-growth cycle despite demonstrating resilience over the past three years, Finance, Economic Development and Tourism MEC Ketso Makume warned during his presentation of the 2025/26 adjustment budget at the Provincial Legislature on Tuesday.
Makume said the province’s economic performance has failed to generate sufficient jobs or reduce widespread poverty, with growth indicators pointing to a fragile and uneven recovery.
Real GDP growth in the Free State slowed dramatically from 2.0 percent in 2022 to just 0.2 percent in 2023 and is expected to recover only marginally to 0.5 percent in 2024, according to the MEC.
“This subdued performance underscores the fragile nature of our economic recovery,” Makume told lawmakers.
Agriculture remains one of the province’s most reliable economic pillars, contributing 6.0 percent of GDP in 2024.
But while it continues to play a critical role, the maturing mining sector is facing “significant structural and operational challenges”, further holding back overall growth.
The services sector, which dominates the provincial economy with a 60 percent share of GDP, is expanding at a sluggish pace, limiting opportunities for inclusive growth.
Makume said the slow expansion is contributing to insufficient job creation and worsening cost-of-living pressures for households across the Free State.
Adding to the concerns is the province’s declining share of the national economy.
The Free State’s contribution to South Africa’s GDP has slipped from 5.0 percent in 2021 to 4.8 percent in 2024, which Makume described as a “gradual erosion of competitiveness” compared to faster-growing provinces.
Looking ahead, the MEC said the province’s economic prospects hinge on decisive and urgent interventions, including improving electricity reliability, strengthening logistics networks, enhancing municipal governance and accelerating investment in key sectors.
“Failure to address these constraints with urgency will entrench a low-growth trajectory, limiting our ability to create jobs and improve living standards for our people,” Makume cautioned.
The adjustment budget comes as the Free State confronts persistent unemployment, low investment levels and service-delivery challenges that continue to weigh heavily on economic performance.